Did victories in certification contests affect the survival of organizations in the American automobile industry during 1895–1912? A replication study

We successfully replicate the highly influential study: “The social construction of reputation ...,”(Rao, 1994) which reports that cumulative victories in certification contests are negatively associated with firm failure. The replication is robust to the inclusion of addi- tional controls. As in the original, tests of whether the the- ory is most powerful under higher uncertainty are not supported. Further, placing second, third, or merely partici- pating in races also negatively predicts firm failure, and there is insufficient information in the data to tease out the importance of these predictors versus race victories. We discuss the assumptions under which the evidence can be interpreted as supportive of a more general argument of “loose coupling”, where affiliation with certification con- tests reduces firm failure.